THE 2004-2005-2006
PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
THE SENATE
PUBLIC WORKS COMMITTEE AMENDMENT BILL 2006
EXPLANATORY MEMORANDUM
(Circulated by authority of the Parliamentary Secretary to the Minister for Finance
and Administration, Senator the Hon Richard Colbeck)
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PUBLIC WORKS COMMITTEE AMENDMENT BILL 2006
OUTLINE
The purpose of the Bill is to amend the Public Works Committee Act 1969 (the Act) to
make a number of changes to the value and definition of a public work that requires
referral to the Parliamentary Standing Committee on Public Works (the Committee).
The Bill is required to update the threshold value at which projects must be referred to
the Committee and allow that value to be otherwise set by regulation as well as to
amend the definition of a `public work'.
The effect of the principles provisions are to require only those public works over $15
million (formerly $6 million) be referred to the Committee. The effect of allowing
the threshold value to be otherwise set in regulation is to provide for greater flexibility
for future updates of the threshold value.
The change to the definition of a `public work' has the effect of clarifying that works
funded through public private partnerships (PPPs) or similar arrangements must be
referred to the Committee. The amended definition of a `public work' also has the
effect of including those public works funded through leasing or other similar
arrangements.
These funding methods are taken into account by altering the characteristics of a
public work, rather than specifically naming the funding method itself. No other
changes are made to the definition of a `public work'. There are also minor changes
to the language of the Act.
The purpose of the Bill is to amend that Act to reflect the changes in the
Commonwealth public works and procurement environment since the Act was last
amended in 1989. This was based on feedback from the Committee and other sources
on the practical operation of the Act, especially as it related to new methods of
procurement and the increase in construction prices since the threshold was last
amended in 1985.
Financial impact statement
There is no net negative financial impact from the amendments. The changes to the
threshold will reduce the compliance costs of those projects valued at $6-15 million.
Including works funded through PPPs will have no financial impact, as those works
were already being referred to the Committee. Including works funded through
leasing arrangements will require a small increase in compliance costs as those
projects will now have to be referred to the Committee.
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PUBLIC WORKS COMMITTEE AMENDMENT BILL 2006
NOTES ON ITEMS
Clause 1: Short title
1. Clause 1 is a formal provision specifying the short title of the Act.
Clause 2: Commencement
2. The Act will commence on the day it receives Royal Assent.
Clause 3: Schedule(s)
3. The amendments to the Act are set out in the Schedule attached to the Bill.
Part 1: Amendments relating to public works
Item 1: Section 5 (definition of public work)
i. This clause removes the words describing a public work, instead
referring them to a new Section, 5AA.
Item 2: After section 5
ii. Inserts a revised definition under Section 5AA of a public work to
include works funded using PPPs and works indirectly funded
through leasing or similar arrangements.
iii. The inclusion of PPPs reflects the current understanding that
works funded through PPPs are implicitly covered by the Act. The
inclusion of works funded through leasing or other similar
arrangements addresses the issue that some fit-outs of leased
accommodation, which are included in the Act, fall outside the
definition of a `public work', due to their funding arrangements.
iv. The specific funding methods are not referred to. Instead, characteristics the
of a public work have been amended so as to
include these works. Two amendments have been made to achieve
this end.
v. Subparagraph (2)(b)(ii), allows for indirect funding of the work,
as per the existing paragraph 3(c) [now 5(c)]. This covers, but is
not limited to, deferred payment, payment through a PPP vehicle,
or payment through leasing or similar arrangements.
vi. Subsection (4) removes the requirement that the Commonwealth
or Commonwealth authority is proposed to become the owner of
the work. Under either funding method, the Commonwealth or
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Commonwealth authority may not necessarily become the owner
of the work. This addresses the existing paragraph 3(c) [now 5(c)]
which only allowed for indirect funding where the Commonwealth
(or Commonwealth authority) was intended to become the owner.
vii. The revised definition does not extend to cover works that are
not "for the Commonwealth" (or a Commonwealth authority). An
example of this is a pre-commitment lease, where the private sector
constructs a building that is subsequently occupied by a
Commonwealth (or a Commonwealth authority) tenant.
Item 3: Subsection 18(8)
viii. This clause replaces the current value with a definition,
allowing a more specific definition of the threshold amount to be
used.
Item 4: At the end of subjection 18(9)
ix. This clause gives a definition to "the threshold amount" which
sets the threshold at $15,000,000 and otherwise allows the amount
to be specified in a regulation. The purpose of allowing a
regulation to define the threshold amount is to allow the threshold
to be altered without having to amend the Act.
Item 5: Paragraphs 40(2)(a) and (b)
x. This clause updates the paragraph references to reflect the altered
paragraph numbers in the definition of a public work that may or
may not be specified in the regulations as being a public work.
Item 6: Application
xi. The purpose of this clause is to require that any work currently
unde...